Wednesday, 27 May 2009

National’s tax-cut lie [update 2]

He rather lets the Nats off the hook at the end, but Brian Rudman’s piece in today’s Herald is worth reading just to be reminded what a cynically broken election promise looks like.

As Rudman says, “Key and English knew about the global crisis as they pledged tax cuts at last year’s election,” and now they’re about to renege on a promise they knew they could never deliver.  In short, they lied – and you bought it.  Rudman summarises:

    Earlier this month, Prime Minister John Key signalled to an audience of his friends at a Business New Zealand meeting the promised tax cuts would be delayed to some unspecified time in the future. He said New Zealand could not afford "a runaway balance sheet".
    Yet back on September 30 last year, Mr English was mocking then Finance Minister Michael Cullen for being over-cautious on the issue. He said: "Dr Cullen cannot be trusted to deliver on any future tax promises."
    He compared that with National which "will have an ongoing programme of personal tax cuts.”

Yeah right.

[English[ said he would treat Labour's tax cuts, which came into force the next day, "as the first tranche on our tax-cut programme. That will be followed by another tranche of tax reductions on April 1, 2009 [which were fully wiped out by increases in ACC levies], and further tranches in 2010 and 2011". He declared: "National has structured its credible economic package to take account of the changing international climate. Our tax cut programme will not require any additional borrowing."

. . . another lie, since even at the time a lot of sleight 0f hand and legerdemain was being used to shuffle the blame for the borrowing onto the need to fund their $7 billion infrastructure binge – rather than it simply being the case that the Nats lacked the balls to cut spending when most needed.  Too many dead spending rats had already been swallowed . . . yet even in October last year, after “the books” had been opened and several more dead rats fell out, Key and English both said “the pledge to deliver about $50 a week to workers on the average wage remained on track.”

Folks, they never meant a word of it. They lied to you – and the lying continued even after they’d won the election on the back of that very lie:

    On December 16, Mr English was up in the House confirming "National will not be going back on any of those promises, as we fully costed and funded them."
   [Yet] the Government is now making out some economic thunderbolt has suddenly hit New Zealand and thrown their pre-election calculations out the window.
    But even economic ignoramuses like myself knew a global crisis was nigh.

In fact, the global crisis wasn’t just nigh – the global collapse had already happened.  All you had to do was look in the newspapers – or the housing markets.  The Dow Jones average is enough to tell the story that’s now being fudged by National – that they were somehow blindsided by a crisis they didn’t see coming.  The f’ing collapse had already happened – as  Tom Woods summarises in his book Meltdown ,which records the course of the crash, “When the New York Stock Exchange closed on October 9, 2007, the Dow Jones Industrial Average was 14,164.53, the highest close ever. Thirteen months later, on November 20, 2008, it closed at 7,552.29, a drop of 46.7 percent.”

Yet over all of those thirteen months and right through their election campaign National never missed a beat – and no political journalist ever asked them to reconcile the irreconcilable.  Sure, bloggers did (well, two of them), and at least one political party, but the Nats just kept on regardless – they kept right on promising “significant personal tax cuts” of  “about $50 a week to workers on the average wage,” and just before Christmas were again confirming “National will not be going back on any of those promises, as we fully costed and funded them,” and they never meant a bloody word of it at any time.

They lied. You bought it.  And fair play to Brian Rudman for being one of the few to point that out, however softly.

Which just leaves one final question that the voters of Mt Albert might be in a position to ask:  “So where are our tax cuts now, you bastards?”

UPDATE 1: Even died-in-the-wool Nat Whale Oil agrees.  See:

    I find myself in agreement with [Rudman].
I wonder why it is that it is deemed acceptable to renege on tax cut promises yet steadfastly adhere to the "no cutting of so-called entitlements" promises?
Perhaps Bill English could explain to the ever patient taxpayer why they should not get a tax cut and they should continue to pay for Working for Families, or Universal Superannuation,  both totally daft ideas completely without logic or merit in these hard economic times.

Not to mention the utterly nonsensical promise to add even more spending: one-third of a billion dollars of taxpayers' money to insulate other people's houses.

UPDATE 2: Right on cue Paul Walker at Anti Dismal quotes a letter Don Boudreaux sent to the New York Times on the reasons for tax cuts:

    By far, the chief economic reason for cutting taxes is to increase the return to productive activity - to increase the return to investment, to risk-taking, to creativity, to work. The economic justification for lower taxes rests squarely on the understanding that cutting marginal tax rates makes profitable many productive efforts, including hiring more workers, that are unprofitable at higher tax rates.

And of course the chief moral reason is that it’s our frigging money they’re spending like water – at a time when we need our money most.


  1. Yeah, Brian Rudman is a cock-sucking lefty. He never made a complaint about no tax-cut during Labour's 9 years in office.

  2. Richard McGrath27 May 2009, 14:28:00

    NS, I'm not sure of Brian Rudman's sexual preferences, and I'll take your word for it that he kept his lips sealed while Cullen spent up large and gave us chewing gum tax cuts. But isn't this blatant lying from Bill English, which surely has John Key's endorsement, a trifle disappointing?

  3. Brian Rudman could be any number of things, none of which are at all relevant to the point he makes very well: that National are about to very cynically and with much aforethought break a very long-standing public promise on which they won an election.

    Answer that, you cock-sucking Nat Supporter.

  4. NS, I think you miss the point - Rudman is calling National to account for breaking not just an election promise, but the major hook to entice voters in the last election. He's not specifically bemoaning a lack of tax cuts per se, so Rusden not complaining about Labour's lack of tax cuts is irrelevant.

    If National hadn't kept insisting that the promised cuts would happen even once the extent of the economic collapse was well known, people would probably take it easier on them. They didn't just make a mistake over their figures, they stood there and lied to our faces.

    It shouldn't be too much of a surprise though, as National does have a history of this - back in the 1990 election, Lockwood Smith secured the student vote by touring the universities and signing pledges that he never adhered to.

    Then again, they're politicians, what do you expect?

  5. I don't know if it's blatant lying by English, McGrath. He was speaking in this electorate during last years campaign and said he was reading up on how the NZ banking system it's quite likely the DOW crash passed him by.

    Also he wanted to come to my house to use the phone to conduct a radio interview - fine with me but I suggested a quiet place could be made available in the venue we were at, which would be more convenient for him. He's not very bright.

  6. Also he wanted to come to my house to use the phone to conduct a radio interview
    Sounds like he wanted to do more than conduct a radio interview!

  7. Marcus: off topic, but in case you missed it, I posted a note to you somewhere else on this blog earlier today. It was tagged on the end of something else - can't remember where - to say that your server wouldn't accept my reply to your email from yesterday.

    Do you have an alternative email address? If so, send it to the same address you used yesterday. Ta.

  8. Hi Sus, yeah I did miss it! My email got accidentally tagged as spam by a client and I've had problems ever since. Try Thanks for your time!

  9. Ruth

    So what you are confirming is that guy English didn't know how the banking system works. He needed to read up on it. Shit-oh-dear, he's been the finance guru of the Nat Socialists for how long now?

    And he missed noticing the collapse of the stock market? It passed him by....

    And he missed noticing that banks in the US and elsewhere collapsed; that others stopped honouring LCs etc. That all passed him by...

    He missed noticing that the property market had gone very soft.

    What you are demonstrating is that the man is incompetent to the point of requiring life support.

    Who voted for these turkeys?


  10. LGM I'm also saying that Bill is not a deceitful liar. In fact he is quite humble and asks for advice.

    You will find that tax cuts are simply not that important to the voting public - that excludes the blogosphere - come the Mt Albert election.

    More important issues need running up the flagpole.

  11. And bloody broadband @ $1.5 billion and insulation that they didn't even promise but was a *Green* party pledge is more important to people???? If they hadn't mentioned it nobody would have expected it.

  12. Ruth

    So, according to you, the man is an incompetent, albeit a humble one with nice manners. What an excellent candidate to have in a position of responsibility and authority- in charge of everyone else...

    Whether the National socialists are liars or incompetents (as you have confirmed them to be), it would appear they have now demonstrated that they are unworthy of anyone's trust. Their word is without value. It is worthless.

    Look, these guys are completely unsuited to running anyone else's life. When the choice they offer is between dishonesty or incompetence, they certainly can't be respected as being up to the rigours of dealing with "important issues that need runing up the flagpole."

    Thanks for taking the time to make that clear.



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